Unlocking Opportunities: How Embracing Apprenticeships Can Shape India’s Youth Employment

- Amit Kumar, Head, Sustainable and Inclusive Growth

July 15, 2024

Meet Akash, a 19-year-old first-generation learner from Raichur, an aspirational district in the southern state of Karnataka. Recently, he received a diploma in Electronics and Communication from an Industrial Training Institute and is now gearing up for an apprenticeship at a leading manufacturing unit. “The training and experience are invaluable in the job market,” says Akash, who will earn a monthly salary of INR 15,000 (USD 180). Beyond the paycheck, Akash is thrilled to be among the few students who have boosted their employability through an apprenticeship training programme.

An apprenticeship is a skill training programme where young people are engaged by a company as apprentices for a short period of classroom (theory) learning, followed by on-the-job (practical) training, allowing them to gain both theoretical knowledge and practical experience.

The Employment Challenge

Mirroring global trends, unemployment remains a challenge for India, especially given its burgeoning youth population.

According to the latest Consumer Pyramids Household Survey by the Centre for Monitoring of Indian Economy (CMIE), the unemployment rate in India rose to 8.1 percent in April 2024. The ILO’s India Youth Employability Report 2024 highlights that youth employment often lacks quality compared to adult employment, with many young people working in vulnerable or informal sectors with low wage and poor work conditions. At the same time, Indian industries are grappling with a severe shortage of skilled workers due to a skills mismatch. This dichotomy presents a formidable challenge for the country, wherein every year, approximately 7-8 million women and men are added to India’s labour force.

To harness this demographic dividend, we need effective pathways to equip youth with market-valued skills. Globally, apprenticeships have proven successful in bridging the skills gap and creating a job-ready workforce. According to the ‘ROI on Apprenticeships 2021’ report by NETAP-Teamlease Skill University, nearly 60 percent of employers found that apprenticeships improve productivity, with 76 percent noting it helps address attrition and reduces hiring costs by 19 percent.

Apprenticeship Landscape and Way Forward

In India, the number of apprentices has increased from 1.9 lakh (190,000) in 2018-2019 to 7.4 lakh (740,000) in 2022-23, thanks to initiatives like the National Apprenticeship Promotion Scheme (NAPS) and National Apprenticeship Testing Scheme (NATS). In the current financial year, the number of enterprises actively participating in apprenticeship training stands only at 13,583. However, this is still small compared to global standards —3 million in Germany, 10 million in Japan, and 20 million in China. Moreover, apprenticeship uptake among small and medium enterprises (SMEs)—India's largest employers—remains low.

Challenges such as lack of awareness, perceptions of overregulation, and complex enrolment processes have hindered apprenticeship adoption in India. Therefore, there is a need to reboot our implementation and communication strategies to make apprenticeships aspirational for youth and establish a business case for enterprises.

Working together with the state and central government and private sector, UNDP has been supporting youth, especially women, by equipping them with 21st century skills, providing career guidance, counselling and exposure to the world of work as well as enhancing their access to finance and business development services to successfully join the workforce and or start/grow their enterprises.

Focused adoption of the following five pathways will enable India to leverage the full potential of apprenticeship training and create a job-ready youth.

First, introduce apprenticeship as a compulsory component of career guidance and counselling in schools, colleges and vocational institutes, as most students are unaware or are ill-informed about the advantage of apprenticeship training.

Second, enhance MSMEs awareness on apprenticeship makes business sense: The active participation of small and medium enterprises can shift momentum. Skill ecosystem enablers should reach out to more than 1 million MSMEs registered on Udyam platform in a targeted manner to educate, encourage, and support them to hire a few apprentices per year and unlock millions of new apprenticeship opportunities for youth.

Third, create strong aggregator networks and build the capacity of district-level Industry Association and Chambers: MSME outreach wouldn’t be successful without the proactive involvement of local industry chambers and associations. A systematic capacity-building plan with financial support to set up apprenticeship promotion cells should be launched to increase the pool of apprenticeship-ready industries.

Fourth, redefine the scope of placement linkages: Apprenticeship training contracts should be counted as the placement target of the training partners under the skilling scheme’s outcome-linked funding. With the added incentive, training partners would proactively collaborate with local industries to get apprenticeship training started in new enterprises.   

Finally, communicate, communicate, communicate: Lack of awareness, misconceptions that confuse apprenticeship with internships or unpaid exploitative labour, and ambiguity about the onboarding process are the most stubborn roadblocks. National and regional mass media should be engaged to raise awareness for the wider economy and trainees alike.

Close to 90 percent of young people live in developing countries, like India. As Akash pins his hope on turning his apprenticeship into a well-paying career, millions of girls and boys in India could use the apprenticeship gateway to enhance their employability and participate in India’s growth story.

With just six years left to achieve the Sustainable Development Goals, humanity depends on the productively engaged young people whose energy, ideas and contributions can share a just and sustainable world for people and planet.